Peter Crichton’s commentary for March 11, 2016

It is amazing what a difference a few rays of sunshine can make to one’s outlook on life and the pig industry in particular, and after a wet and windy week, weather conditions have calmed down to the extent that those of us whose job it is to sell pigs have something of a spring in our step . . . but only a small one.

Although the SPP is still following its downward track and stands at 112.12p, it only fell by a gnat’s whisker on this occasion. Most contract weekly announced prices have remained at similar levels, and in the spot market there were one or two players showing a little more interest than they have done during the past few months and actually asking what pigs might be available, although at this stage it’s early days to say the prices actually rose by more than a copper or two.

There are, however, no “90p/kg” pigs being traded, and very few reports of any at much less than 103p/kg. But, with a slight reduction in the numbers of live pigs available, we could see a modest increase in demand, although the loin remains the hardest and one of the most expensive parts of the pig to sell.

Reports of a 5c improvement in the German pigmeat price have also helped to restore a little more optimism to the market, but prices have a long way to travel before they’re anywhere near break-even levels.

A glance at the calendar also reveals that Easter lies just two weeks away with “a short killing week”, but most of the larger operators will be working on Bank Holiday Monday and are indicating that they should be able to absorb the Easter numbers without too much of a problem . . . we’ll see.

Cull sow prices are also reflecting marginal improvements in European pigmeat prices and, although UK export sow buyers were suggesting on Friday morning that prices were likely to remain at stand-on levels, by noon this had been translated into modest rises of a penny or so in some quarters. Once again, nothing to write home about, but a small step in the right direction.

On the currency front, the euro has ended something of a rollercoaster week and, like most rollercoasters, has ended up back where it started, trading on Friday afternoon worth 77.75p compared with 77.49p seven days earlier.

Weaner values have, however, continued to ease, with the latest AHDB 30kg ex-farm weaner average quoted at £36.61/head and 7kg at £28.32/head, but there’s still a significant lack of confidence among weaner buyers about finished pig prices in the months ahead, which is adding to their caution despite the availability of relatively cheap feeds.

The AHDB weaner average has to be treated with caution because of the very wide range of values between Red Tractor and Freedom Food, and spot and contract quotes, which can vary by £5 to £7/head within the sample.

The feed market has remained quiet with ex-farm wheat quoted at £97.60/t, but very few sellers at this level. Futures prices have also ended the week at similar levels, with March 2016 quoted at £101.35/t and July at £106.20/t.

Protein prices have increased, with rape meal ex-Kent up £5/t at £143/t for this month’s delivery and soya meal ex-Liverpool up £1/t for March delivery to £263/t.

And finally, every cloud has a silver lining with news that final figures published by the EU in its December 2015 census are indicating breeding sows are down by 1.8% and in-pig sows by 2.1%. Newly served gilt numbers have also dropped significantly by 6.2% and, although the supply of slaughter pigs has yet to fall, at least this reduction in the breeding herd is a step in the right direction.

And finally finally, for those of you who live in East Anglia and want to become involved in an even bigger gamble than the pig market, i’is point-to-point time at the Ampton racecourse, near Bury St Edmunds, where Peter Crichton is sponsoring the Club Members race at 1.30pm. There may well be another race to the bar afterwards if the right horse wins! All good pencil sharpening stuff for Cheltenham next week.

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About The Author

Based in Suffolk, Peter Crichton provides a wide range of valuation, auction and livestock marketing services, as well as supplying the UK pig industry with a wide range of consultancy services covering tenancy, contract advice, pig equipment and herd valuations as well as dispute resolution. For more information visit: www.petercrichton.co.uk